Reverse Repo is Crashing to Zero - Here's What Happens Next

Timecodes
0:00 Video Overview
0:27 The Reverse Repo Facility
1:42 Treasury Bills
5:23 Treasury Auction
7:43 Effects of Reverse Repo Rate at Zero

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I am not a CPA, attorney, or licensed financial advisor and the information in these videos shall not be construed as tax, legal, or financial advice from a qualified perspective. Linked items may create a financial benefit for Heresy Financial.

[martinjdesmond]

What few Americans understand is that we will be paying more in interest expense in 2024 than we will spend on defense.

[WillMoon]

Just heard this morning - tons of people from Cisco getting laid off. If Cisco is laying off employees… senior employees… that’s not a good sign…

[agrivere]

You've touched on this before as I recall, but there is currently $3.5 trillion in bank reserves on deposit at the Fed. Considering that cash is going to have to come from somewhere, and Powell doesn't seem like he wants to start printing money again, I've predicted for some time that the Fed will come up with some reason to reduce bank reserve requirements and allow that cash to move back into the financial markets. That will allow them to continue to say "see, the economy is doing pretty well and we haven't printed any money", at least through the election, which is the point.

[zedleppelin]

The last time reverse repo went to zero was when overnight lending rates skyrocketed and the Fed stepped in to keep the liquidity in the banks

[briandodson]

They're running out of options to keep it all going without admitting that it's all failing and switching back to QE. I suspect we'll get some more pump but only temporarily and these cycles between QE and QT will get shorter and shorter.

[MirceaKitsune]

"If you're looking for a way to profit..."

No no no: You're looking for a way to survive.

[sameftek]

They just passed a new Bill that pays close to 100 Billions for other countries. where that money comes from?

[taurinrowe]

Your videos are awesome and teaches a lot about how the financial system works. Thanks so much for sharing

[lulumallory]

Cash is a liability on the banks balance sheets, so they send it to RRP and get risk free return on their money. As liquidity dries up, RRP drains dry. You need to do a video on the Plunge Protection Team.

[hart-coded]

Awesome report. Love how you always simplify a complex subject

[jonathantaylor]

No QE (for UST) this time. That worked in 2009 when there was 0.4% deflation. You can print your way out of that. The problem is the inflation rate is now 3.4% and if they turn on the printer it will quickly be 4%. Then 5%. If the FED drives real yield on treasuries negative (with printed money of course) you will see a bond revolt. Current bond investors will find alternatives. The FED printing trillions of dollars while these "former" bond investors look for alternatives would be two massive inflationary forces pushing in concert.

[_KarlS]

Boycott Treasury Bonds
Join us, say NO to out of control spending. Stop funding Treason

Wow! That is the best explanation of how reverse repo works I’ve ever heard.

Thank you

[hanklane]

Thanks thanks for sharing! Now need to figure out what to do in this situation

[danieldan]

Final stages before they rump up the money printing.

[wolf-ywwk]

damn this is an interesting take makes so much sense. w so many moving parts it’s hard to see how all the cause and effect until it’s too late. this was a good peak into future before the shtf.

[lainiwakura]

Can someone please help me to understand this: how can the government suck cash out of the reverse REPO? Does the Fed provides reverse REPO funds to the government?
This is a key point to understand the whole argument. Thanks a lot

[PilotVBall]

Signed into law today 04/24/2024 is a $95 billion military spending package; the regime labeled it as foreign aid. Guess where that money is coming from? We might barely have 32 days left before REPO reaches $0.

[GotGracexxxxx]

On the asymmetric bets, I wouldn’t say that the risk of loss is low. Instead, I would say that the cost of loss is limited and the risk of loss is minimized.

[squid]

They keep maintaining that they will do cuts, despite all the data pointing that they shouldn't. I think they see something coming that the average person doesn't. Maybe this, maybe something else, I don't know. But I do think they believe a liquidity issue will pop up sometime this year.